American Woodmark Corporation (AMWD)

Item 1. BUSINESS

Our Company

American Woodmark Corporation ("American Woodmark," the "Company," "we," "our" or "us") was incorporated in 1980 by the four principal managers of the Boise Cascade Cabinet Division through a leveraged buyout of that division. We operated privately until 1986 when we became a public company through a registered public offering of common stock.

From design to installation, we believe we offer a higher level of service than our competitors, serving both national and regional markets with the most relevant options. This makes us the cabinetmaker of choice for many homeowners, builders, designers, dealers, distributors, and retailers across the country. Our customer base is expanding as we build our portfolio of brands and reach new markets beyond kitchen and bath. Aspirational yet grounded, we've embraced an ambitious, strategic vision that will advance us boldly into the future.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and all amendments to those reports are available free of charge on our website, americanwoodmark.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"). The contents of our website are not, however, part of, or incorporated by reference into, this report.

Our Business

American Woodmark celebrates the creativity in all of us. With over 7,800 employees and more than a dozen brands, we're one of the nation's largest cabinet manufacturers. From inspiration to installation, we help people find their unique style and turn their home into a space for self-expression. By partnering with major home centers, builders, and independent dealers and distributors, we spark the imagination of homeowners and designers and bring their vision to life. Across our service and distribution centers, our corporate office and manufacturing facilities, you'll always find the same commitment to customer satisfaction, integrity, teamwork, and excellence.

We believe the strength of our culture and connections will deliver profitability through Growth, Digital Transformation, and Platform Design ("GDP"). Our GDP strategy is the lens we use to view our long-term decision-making, enabling growth and profitability through the cycle. Growth will maximize our market opportunity through key initiatives. Digital Transformation will strengthen our goal of becoming "One American Woodmark." Lastly, Platform Design will leverage complexity reduction and operational excellence to drive margin improvement.

Our Products

We offer a wide variety of products that fall into product lines including kitchen cabinetry, bath cabinetry, office cabinetry, home organization and hardware. Our cabinetry products are available in a variety of designs, finishes and finish colors and door styles.

Made-to-order products are typically constructed with higher grade materials and more options compared to our stock products; and are special ordered from all channels and shipped directly to the home from our factory. Stock products typically have limited SKUs and high volumes; and are primarily sold point-of-sale as “cash and carry products” through home centers. Our kitchen cabinetry and bath cabinetry products are offered across all product categories (made-to-order and stock) while our home organization products are exclusively stock products.

Our Market

Our products are sold on a national basis across the United States to the remodeling and new home construction markets. We service these markets through three primary channels: home centers, builders, and independent dealers and distributors. We distribute our products to each market channel directly from our assembly plants and through a third party logistics network.

Our Customers

We serve three main categories of customers: home centers, builders, and independent dealers and distributors.

Home Centers

Pro business customers, contractors, builders, remodelers, and do-it-yourself homeowners use our products primarily for repair and remodel ("R&R") projects. Products for R&R projects are predominately purchased through home centers such as Home Depot and Lowe's. Due to the market presence, store network and customer reach of these large home centers, our strategy has been to develop long-term strategic relationships with both Home Depot and Lowe's to distribute our products. During the fiscal year ended April 30, 2025 ("fiscal 2025"), Home Depot and Lowe's combined accounted for approximately 40.8% of net sales of the Company. The loss of either Home Depot or Lowe's as a customer would have a material adverse effect on us.

Builders

The builder channel represents a large portion of our overall revenue and has historically been a strategic component of our go-to-market strategy. We serve 17 of the top 20 U.S. builders with a high degree of geographic concentration around major metro areas where single family starts are most robust. We also serve multi-family builders, primarily in the Southwest region of the U.S. Our various service center locations are close to these builders and enable us to deliver exceptional service to our builder partners. During fiscal 2025, builders accounted for approximately 43.5% of net sales of the Company.

Independent Dealers & Distributors

In 2010, we expanded our business into the independent dealers channel with the launch of the Waypoint Living Spaces® brand. Today, we sell this brand to over 1,500 regional and local dealers across the country. The independent dealer and distributor channel is the largest by participant volume, characterized by a high degree of entrepreneurship and one that rewards suppliers that deliver great service. Our ability to provide superior value delivered with exceptional service has helped drive our expansion into this channel which we expect will continue to be a strong growth and market share opportunity for us. Within our distributor channel we also sell our recently launched 1951 CabinetryTM brand through a network of regional distributors who are focused on selling a complete variety of building materials to small and midsized builders and contractors within their local markets. 1951 CabinetryTM is sold directly to distributors with a wide range of product offerings. Their styles and finishes blend both timeless and on-trend designs that are curated to favor individual preferences for a traditional or contemporary feel. The brand maintains a commitment to longevity without compromising the excitement surrounding modern flair. Alongside the launch of 1951 CabinetryTM comes 1951 FoundationsTM and 1951 ProgressionsTM. 1951 FoundationsTM and 1951 ProgressionsTM utilize American Woodmark’s Made-to-Stock options to address the market demand for high-quality craftsmanship at an affordable price point with their focused selections of the most popular styles and finishes. During fiscal 2025, independent dealers and distributors accounted for approximately 15.8% of net sales of the Company.

Manufacturing, Distribution and Service

Our manufacturing facilities are strategically located to serve our customers, which enhances our ability to provide high quality, value priced products with low production costs. We manufacture our products across 17 facilities located in Maryland, Indiana, West Virginia, Georgia, Arizona, Kentucky, California, Texas, and North Carolina in the United States, and Tijuana and Monterrey, Mexico. We recently built a new manufacturing facility in Monterrey, Mexico, which began operations in the third quarter of fiscal 2024, and expanded our Hamlet, North Carolina facility. This investment established a component operation in eastern Mexico, and a stock kitchen and bath center of excellence delivering additional capacity for our east coast markets. The geographic distribution of our facilities throughout the United States, together with our third party logistics network for the American Woodmark business and beneficial freight arrangements with home centers, enable us to provide a "short supply chain" to our U.S. customers. The ordering patterns of Home Depot and Lowe's, our two biggest customers, require suppliers to have sufficient manufacturing capacity to meet demand and to serve a large number (frequently hundreds to thousands) of stores. They impose strict logistics and performance criteria on us. The scale and strategic locations of our manufacturing facilities help us to meet these demands of the home center customers, as well as provide a logistics platform that we can leverage for builders and independent dealers and distributors. We distribute our products through one stand-alone distribution center, distribution centers located in some of our manufacturing facilities, and other third party locations to maximize efficiency. Our vertically-integrated production and assembly lines, standardized product construction, and investments in automation have allowed us to continuously improve productivity, and develop an expertise in wood processing, alternate materials, and yield-maximizing technologies. We have standardized our raw material inputs and a number of our production processes, which reduces logistical requirements to manufacture and gives us increased economies of scale in sourcing these inputs. Certain of our inputs are also partially processed by our vendors, which reduces cost. In addition, our production of labor-intensive manufacturing and fabrication processes in our four Mexico facilities has enabled us to keep overall labor costs low while maintaining higher quality, greater speed-to-market and transportation cost advantage over Asian based manufacturers.

We also provide complete turnkey installation services to our direct builder customers via our network of eight primary service centers that are strategically located throughout the United States in Virginia, Texas, North Carolina, Georgia, Florida, Arizona and California.

We regularly evaluate our organizational productivity and supply chains and assess opportunities to reduce costs and enhance quality. Through operational excellence, we strive to improve quality, speed and flexibility to meet changing and uncertain market conditions, as well as manage cost inflation, including wages and employee medical costs. During the third quarter of fiscal 2025, the Company's Board of Directors (the "Board") approved the closure and eventual disposal of our manufacturing plant located in Orange, Virginia.

Raw Materials and Suppliers

The primary raw materials used in our products are various wood species, including hard maple, cherry, and beech, particle board, medium density fiberboard, high density fiberboard, and plywood. Additional raw materials include paint, manufactured components, and hardware. We purchase these, and other raw materials, from more than one source and generally believe them to be readily available. We rely on outside suppliers for some of our key components and do not typically enter into long-term contracts with our suppliers or sourcing partners. We source a portion of our components from third parties in Asia and Europe. The distances involved in these arrangements, together with the differences in business practices, shipping and delivery requirements, and laws regulations, and tariffs add complexity to our supply chain logistics and increase the potential for interruptions in our production scheduling. The costs of the Company's products are subject to inflationary pressures, commodity price fluctuations, and importation tariffs. The Company has generally been able, over time, to recover the effects of inflation, commodity price fluctuations, and tariffs on imports through sales price increases. The uncertainty around tariffs is further discussed in Item 1A. "Risk Factors".

Competition

We operate in a highly fragmented industry that is composed of several thousand local, regional, and national manufacturers. Most of our competitors compete on a local or regional basis, but others, like us, compete on a national basis as well. Our competitors include importers and large consolidated operations as well as relatively small, local cabinet manufacturers. Moreover, companies in other building products industries may compete with us. Competitive factors within the industry include pricing, quality, product availability, service, delivery time, and relationships with customers. Our principal means for competition is our breadth and variety of product offerings, expanded service capabilities, geographic reach, competitive price points for our products, and affordable quality. We believe we are a top three manufacturer of kitchen, bath, and home organization products in the United States based on publicly available information.

Environmental Matters and Regulatory Matters

Our operations are subject to federal, state and local environmental laws and regulations relating to, among other things, the generation, storage, handling, emission, transportation, and discharge of regulated materials into the environment. Permits are required for certain of our operations, and these permits are subject to revocation, modification, and renewal by issuing authorities. Governmental authorities have the power to enforce compliance with their regulations, and violations may result in the payment of fines or the entry of injunctions, or both. We may also incur liabilities for investigation and clean-up of soil or groundwater contamination on or emanating from current or formerly owned and operated properties, or at offsite locations at which regulated materials are located where we are identified as a responsible party. Discovery of currently unknown conditions could require responses that could result in significant costs.

Intellectual Property

We maintain trademarks, copyrights, and trade secrets. We sell many of our products under a number of registered and unregistered trademarks, which we believe are widely recognized in our industry. We rely on trade secrets and confidentiality agreements to develop and maintain our competitive position. Monitoring the unauthorized use of our intellectual property is difficult, and the steps we have taken may not prevent unauthorized use of our intellectual property. The disclosure or misappropriation of our intellectual property could harm our ability to protect our rights and our competitive position. If we must litigate to protect our rights, we may incur significant expenses and divert significant attention from our business operations. To date, we have not relied on material patents in operating our business.

Seasonality

Our business has been subject to seasonal influences, with higher sales typically realized in our first and fourth fiscal quarters. General economic forces and changes in our customer mix have reduced seasonal fluctuations in revenue over the past few years and this trend is expected to continue.

Human Capital Resources

Employees

As of April 30, 2025, we employed over 7,800 full-time employees, with approximately 228 unionized employees in Anaheim, California. We believe that our employee relations and relationship with the union representing the employees in Anaheim are in good standing.

Culture and Core Values

At American Woodmark, our mission to create value through people remains unchanged. The way we conduct our business and interact with our customers, vendors, and the communities in which we operate is driven by our core principles of customer satisfaction, integrity, teamwork, and excellence. These principles also guide our interactions with employees and serve as a basis for setting goals for and evaluating our employees. By living out these principles, we believe we will be best positioned to attract, develop, and promote a broad range of talent and to conduct our business in a responsible, ethical, and professional manner. To that end, we have, among other things, established policies under which we strive to:

•Engage with our key stakeholders, including employees, to ensure their needs and concerns are heard and addressed, and if appropriate, incorporated into our strategy;

•Maintain a safe and enriching working environment where all employees are treated with respect and are able to achieve their full potential;

•Encourage employees to volunteer in our communities through internally or externally organized events;

•

Loading financial statements...

Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-02-26 (period ending 2026-01-31).

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes, both of which are included in Part I, Item 1 of this report. The Company's critical accounting policies are included in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2025.

Forward-Looking Statements

This report contains statements concerning the Company's expectations, plans, objectives, future financial performance, and other statements that are not historical facts. These statements may be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify forward-looking statements by words such as "anticipate," "estimate," "forecast," "expect," "believe," "should," "could," "would," "plan," "may," "intend," "estimate," "prospect," "goal," "will," "predict," "potential," or other similar words. Forward-looking statements contained in this report, including elsewhere in "Management's Discussion and Analysis of Financial Condition and Results of Operations," are based on current expectations and our actual results may differ materially from those projected in any forward-looking statements. In addition, the Company participates in an industry that is subject to rapidly changing conditions and there are numerous factors that could cause the Company to experience a decline in sales and/or earnings or deterioration in financial condition. Factors that could cause actual results to differ materially from those in forward-looking statements made in this report include but are not limited to:

•risks related to sourcing and selling products internationally and doing business globally, especially due to our significant operations in Mexico, including the imposition and uncertainty of tariffs or duties on those products, and increased transportation costs and delays;

•an inability to obtain raw materials in a timely manner or fluctuations in raw material, transportation, and energy costs due to inflation, tariffs or otherwise;

•the loss of or a reduction in business from one or more of our key customers;

•negative developments in the macro-economic factors that impact our performance such as the U.S. housing market, mortgage interest rates, general economy, unemployment rates, and consumer sentiment and the impact of such developments on our and our customers' business, operations, and access to financing;

•a failure to attract and retain certain members of management or other key employees or other negative labor developments, including increases in the cost of labor;

•competition from other foreign and domestic manufacturers and suppliers and the impact of such competition on pricing and promotional levels;

•an inability to develop new products or respond to changing consumer preferences and purchasing practices;

•increased buying power of large customers and the impact on our ability to maintain or raise prices;

•a failure to effectively manage manufacturing operations, alignment, and capacity or an inability to maintain the quality of our products;

•a delay in, or failure to complete, the proposed Merger with MasterBrand, Inc. whether due to an inability by either party to satisfy one or more conditions to closing, the occurrence of events or changes in circumstances that give rise to the termination of the Merger Agreement by either party, or otherwise;

•delays in obtaining, adverse conditions contained in, or an inability to obtain regulatory approvals or complete regulatory reviews required to complete the Merger;

•the cost and outcome of any legal proceedings relating to the Merger;

•impacts of the proposed Merger on our ability to hire and retain employees and on our relationships with distributors, customers, vendors, suppliers and other third parties;

•diversion of management time and attention from ordinary course business operations to the Merger and other potential disruptions to our business relating to the Merger;

•information systems interruptions or intrusions or the unauthorized release of confidential information concerning customers, employees, or other third parties;

•the cost of compliance with, or liabilities related to, environmental or other governmental regulations or changes in governmental or industry regulatory standards, especially with respect to health and safety and the environment;

•risks associated with the implementation of our growth, digital transformation, and platform design strategies;

•unexpected costs resulting from a failure to maintain acceptable quality standards;

•changes in tax laws or the interpretations of existing tax laws;

•the impact of another pandemic on our business, the global and U.S. economy, and our employees, customers, suppliers, and logistics system;

•the occurrence of significant natural disasters, including earthquakes, fires, floods, hurricanes, or tropical storms;

•the unavailability of adequate capital for our business to grow and compete;

•limitations on operating our business as a result of covenant restrictions under our indebtedness, and our ability to pay amounts due under our credit facilities and our other indebtedness, and interest rate increases; and

•further impairment of goodwill or potential impairment of our other long-lived assets.

Additional information concerning factors that could cause actual results to differ materially from those in forward-looking statements is contained in this report, including elsewhere in "Management's Discussion and Analysis of Financial Condition and Results of Operations" and under Part II, Item 1A, "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended October 31, 2025, and also in the Company's most recent Annual Report on Form 10-K for the fiscal year ended April 30, 2025, filed with the SEC, including under Part I, Item 1A, "Risk Factors," Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk." While the Company believes that these risks are manageable and will not adversely impact the long-term performance of the Company, these risks could, under certain circumstances, have a material adverse impact on its operating results and financial condition.

Any forward-looking statement that the Company makes in this report speaks only as of the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors as a result of new information, future events or otherwise, except as required by law.

Overview

The Company manufactures and distributes kitchen, bath, and home organization products for the remodeling and new home construction markets. Our products are sold on a national basis directly to home centers and builders and through a network of independent dealers and distributors. As of January 31, 2026, the Company operated 17 manufacturing facilities in the United States and Mexico, and eight primary service centers and one distribution center located throughout the United States.

The three month period ended January 31, 2026 was the Company's third quarter of its fiscal year that ends on April 30, 2026 ("fiscal 2026").

On August 5, 2025, the Company entered into a Merger Agreement with MasterBrand and Merger Sub, providing for Merger Sub, at closing, to merge with and into the Company with the Company surviving as a wholly owned subsidiary of MasterBrand. See Note A – Basis of Presentation for more information.

Tariffs

The Company continues to actively monitor recent trade policy and tariff announcements, including changes to the previously announced Trade Expansion Act of 1962 (Section 232) tariffs on softwood timber and lumber, certain kitchen cabinets and bathroom vanities, and certain upholstered wooden furniture, effective January 1, 2026, as well as the February 20, 2026 Supreme Court decision to render tariffs implemented under the International Emergency Economic Powers Act (IEEPA) of 1977 to be illegal. Increased restrictions on global trade, including an increase in U.S. tariffs and any retaliatory responses thereto, have resulted in and could further result in, among other things, increased input costs, supply chain disruptions, decreased consumer demand and volatility in foreign exchange rates and financial markets. We continue to analyze the impact of these actions as they evolve and adjust our mitigation strategy, including pricing, productivity and repositioning our supply chain to offset the impact of the tariff exposure as trade policy evolves. The uncertain and evolving market dynamics and global trade environment, including the imposition and uncertainty of the tariffs noted above, could have a material adverse effect on the Company’s business, financial condition, and results of operations. As of the end of the third quarter of fiscal 2026, we estimate the unmitigated tariff impact at the rates, in effect as of the end of the third quarter of fiscal 2026, to represent approximately 3.5-4.0% of the Company’s annualized net sales with the impact varying by product category. This impact does

not include the potential increase on Section 232 tariffs to 50% on January 1, 2027 or any changes due to the Supreme Court decision.

Financial Overview

The Company was impacted by the following macro-economic trends during the third quarter of fiscal 2026:

•Existing home sales remain near thirty-year lows, the median price per existing home sold increased during the fourth calendar quarter of 2026 compared to the same period one year ago by 1.2% according to data provided by the National Association of Realtors, and existing home sales increased 1.0% during the fourth calendar quarter of 2026 compared to the same period in the prior year;

•The unemployment rate increased to 4.3% as of January 2026 compared to 4.0% as of January 2025, and 4.2% in April 2025, according to data provided by the U.S. Department of Labor;

•Mortgage interest rates decreased with a thirty-year fixed mortgage rate of approximately 6.1% in January 2026 compared to 7.0% in January 2025, according to Freddie Mac;

•Consumer sentiment as tracked by Thomson Reuters/University of Michigan decreased from 71.1 in January 2025 to 56.4 in January 2026; and

•The inflation rate as of January 2026 was 2.4%, compared to 3.0% in January 2025 and 2.3% in April 2025 according to data provided by the U.S. Department of Labor.

The Company believes there is no single indicator that directly correlates with cabinet remodeling market activity. For this reason, the Company considers other factors in addition to those discussed above as indicators of overall market activity including credit availability, home-owner equity, and housing affordability.

The Company incurred a net loss of $28.7 million, or 8.9% of net sales, for the third quarter of fiscal 2026, compared with net income of $16.6 million, or 4.2% of net sales, in the same period of the prior year, and incurred a net loss of $8.0 million, or 0.7% of net sales, for the first nine months of fiscal 2026, compared with net income of $73.9 million, or 5.6% of net sales, in the same period of the prior year.

The results of our quantitative goodwill impairment analysis as of December 31, 2025 indicated a goodwill impairment of $30.1 million. We recorded this non-cash impairment charge within Goodwill Impairment in our Condensed Consolidated Statements of Operations in the third quarter of fiscal 2026. See Note A — Basis of Presentation for further discussion.

The Company recognized $3.2 million of total pre-tax restructuring charges, net during the third quarter of fiscal 2026 and $5.4 million of total pre-tax restructuring charges, net during the first nine months of fiscal 2026, related to reductions-in-force implemented in the first nine months of fiscal 2026 in the United States and Mexico, the closure of the Dallas, Texas distribution facility approved in the second quarter of fiscal 2026, and the closure of the manufacturing plant in Orange, Virginia approved in the third quarter of fiscal 2025. See Note O — Restructuring Charges, Net for further discussion.

Results of Operations

	Three Months Ended						Nine Months Ended
	January 31,						January 31,
(in thousands)	2026		2025		Percent Change		2026		2025		Percent Change
Net sales	$	324,300	$	397,580	(18.4)	%	$	1,121,983	$	1,309,190	(14.3)	%
Gross profit	$	37,752	$	59,764	(36.8)	%	$	165,145	$	238,341	(30.7)	%
Selling and marketing expenses	$	19,241	$	19,537	(1.5)	%	$	64,532	$	65,612	(1.6)	%
General and administrative expenses	$	19,075	$	18,632	2.4	%	$	66,356	$	60,371	9.9	%

Net Sales

Net sales were $324.3 million for the third quarter of fiscal 2026, a decrease of $73.3 million or 18.4% compared to the same period of fiscal 2025. For the first nine months of fiscal 2026, net sales were $1,122.0 million, reflecting a $187.2 million or 14.3% decrease compared to the same period of fiscal 2025. Builder sales decreased 30.5% in the third quarter of fiscal 2026 and 22.3% during the first nine months of fiscal 2026 compared to the same prior year periods. The Company believes that fluctuations in single-family housing starts and completions are the best indicator of new construction cabinet

activity. Assuming a sixty to ninety day lag between housing starts and the installation of cabinetry, single-family housing starts decreased 11.1% during the third quarter of fiscal 2026 over the comparable prior year period, according to the U.S. Department of Commerce. We are experiencing a retraction in the new construction market related to macroeconomic factors, including a lack of move-in ready homes, high mortgage rates, weaker consumer confidence, and government tariff policy related uncertainty. We are also experiencing a shift in the mix of products being used and recent share losses to importers of ready-to-assemble cabinetry.

The Company's remodeling sales, which consist of our independent dealer and distributor sales and home center retail sales, decreased 10.1% during the third quarter of fiscal 2026 and 7.9% during the first nine months of fiscal 2026 compared to the same prior year periods. Our home center channel decreased by 9.1% during the third quarter of fiscal 2026 and 7.6% during the first nine months of fiscal 2026 compared to the same periods of fiscal 2025. Our independent dealer and distributor channel decreased 12.9% during the third quarter and 8.9% during the first nine months of fiscal 2026 compared to the comparable prior year periods. Demand trends remain under pressure for our made-to-order and stock kitchen products primarily due to lower in-store traffic rates, consumers prioritizing smaller sized projects, and consumers shifting preferences towards more affordable, value-based product offerings.

Gross Profit

Gross profit margin for the third quarter of fiscal 2026 was 11.6% compared with 15.0% for the same period of fiscal 2025, representing a 340 basis point decrease. Gross profit margin for the first nine months of fiscal 2026 was 14.7% compared with 18.2% for the same period of fiscal 2025, representing a 350 basis point decrease. Gross profit margin in the third quarter and first nine months of fiscal 2026 was negatively impacted by lower sales volumes, an unfavorable mix shift towards more affordable, value-based offerings, volume deleverage in our manufacturing locations, and higher tariff and product input costs, partially offset by lower volume-based costs at our operating locations, as well as cost savings initiatives within our manufacturing platforms and builder service centers and controlled discretionary spending.

Selling and Marketing Expenses

Selling and marketing expenses decreased $0.3 million or 1.5% during the third quarter of fiscal 2026 and decreased $1.1 million or 1.6% during the first nine months of fiscal 2026, compared to the same periods of the prior year. Selling and marketing expenses were 5.9% of net sales in the third quarter of fiscal 2026, compared with 4.9% for the same period of fiscal 2025. Selling and marketing expenses were 5.8% of net sales in the first nine months of fiscal 2026, compared with 5.0% for the same period of fiscal 2025. The increase in selling and marketing expenses as a percentage of net sales during the first nine months of fiscal 2026 was primarily attributed to a decline in net sales. Costs decreased during the first nine months of fiscal 2026 due to timing of marketing-related product launch costs, timing of digital and print media, and controlled discretionary spending.

General and Administrative Expenses

General and administrative expenses increased by $0.4 million or 2.4% during the third quarter of fiscal 2026 and $6.0 million or 9.9% during the first nine months of fiscal 2026, compared to the same periods of the prior year. General and administrative expenses were 5.9% of net sales in the third quarter of fiscal 2026, compared with 4.7% of net sales in the third quarter of fiscal 2025. General and administrative expenses were 5.9% of net sales in the first nine months of fiscal 2026, compared with 4.6% for the same period of fiscal 2025. The increase in general and administrative expenses as a percentage of net sales during the third quarter and first nine months of fiscal 2026 was primarily attributed to expenses associated with the pending Merger of $4.2 million for the third quarter and $13.4 million for the first nine months of fiscal 2026, and increased Digital Transformation spending related to our ERP deployment strategy of $1.3 million for the third quarter and $4.8 million for the first nine months of fiscal 2026, partially offset by decreased incentive costs and controlled discretionary spending.

Effective Income Tax Rates

The effective income tax rates for the three- and nine-month periods ended January 31, 2026 were 21.3% and (1.1)%, respectively, compared with 16.0% and 21.9% in the comparable periods in the prior fiscal year, and the difference was primarily due to the non-deductible goodwill impairment and Merger-related costs recognized in the current period.

Non-GAAP Financial Measures

We have reported our financial results in accordance with U.S. generally accepted accounting principles (GAAP), and have also discussed our financial results using the non-GAAP measures described below.

A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is set forth below.

Management believes all these non-GAAP financial measures provide an additional means of analyzing the current period's results against the corresponding prior period's results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

EBITDA, Adjusted EBITDA and Adjusted EBITDA margin

We use EBITDA, Adjusted EBITDA and Adjusted EBITDA margin in evaluating the performance of our business, and we use each in the preparation of our annual operating budgets and as indicators of business performance and profitability. We believe EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance. Additionally, Adjusted EBITDA is a key measurement used in our Term Loans to determine interest rates and financial covenant compliance.

We define EBITDA as net (loss) income adjusted to exclude (1) income tax expense, (2) interest expense, net, and (3) depreciation and amortization expense. We define Adjusted EBITDA as EBITDA adjusted to exclude (1) expenses related to the pending Merger with MasterBrand, Inc., (2) restructuring charges, net, (3) goodwill impairment, (4) net gain/loss on debt modification, (5) stock-based compensation expense, (6) gain/loss on asset disposals, and (7) change in fair value of foreign exchange forward contracts. We believe Adjusted EBITDA, when presented in conjunction with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business.

We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales.

Adjusted EPS per diluted share

We use Adjusted EPS per diluted share in evaluating the performance of our business and profitability. Management believes that this measure provides useful information to investors by offering additional ways of viewing the Company's results by providing an indication of performance and profitability excluding the impact of unusual and/or non-cash items. We define Adjusted EPS per diluted share as diluted earnings per share excluding the per share impact of (1) expenses related to the currently proposed Merger with MasterBrand, (2) restructuring charges, net (3) goodwill impairment, (4) net gain/loss on debt modification, (5) change in fair value of foreign exchange forward contracts, and (6) the associated tax benefits.

Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin
	Three Months Ended						Nine Months Ended
	January 31,						January 31,
(in thousands)	2026			2025			2026			2025
Net (loss) income (GAAP)	$	(28,715)		$	16,571		$	(8,023)		$	73,890
Add back:
Income tax expense	(7,794)			3,145			86			20,776
Interest expense, net	3,677			2,816			12,344			7,554
Depreciation and amortization expense	16,055			14,583			48,247			40,851
EBITDA (Non-GAAP)	$	(16,777)		$	37,115		$	52,654		$	143,071
Add back:
Merger related expenses (1)	4,156			—			13,441			—
Restructuring charges, net (2)	3,168			520			5,448			1,653
Goodwill impairment	30,129			—			30,129			—
Net loss on debt modification	—			—			—			364
Change in fair value of foreign exchange forward contracts (3)	(1,010)			(1,418)			(5,624)			8,266
Stock-based compensation expense	1,713			2,141			6,600			7,946
Net loss on disposal of property, plant and equipment	207			87			816			229
Adjusted EBITDA (Non-GAAP)	$	21,586		$	38,445		$	103,464		$	161,529
Net Sales	$	324,300		$	397,580		$	1,121,983		$	1,309,190
Net income margin (GAAP)	(8.9)		%	4.2		%	(0.7)		%	5.6		%
Adjusted EBITDA margin (Non-GAAP)	6.7		%	9.7		%	9.2		%	12.3		%

(1) Merger-related expenses are comprised of expenses related to the pending Merger with MasterBrand, Inc.

(2) Restructuring charges, net are comprised of expenses incurred related to reductions-in-force implemented in the first nine months of fiscal 2026 in the U.S. and Mexico, the closure of the distribution facility located in Dallas, Texas, which was announced in August 2025, and the closure of the manufacturing facility located in Orange, Virginia, which was announced in January 2025.

(3) In the normal course of business, the Company is subject to risk from adverse fluctuations in foreign exchange rates. The Company limits these risks by using foreign exchange forward contracts. The changes in the fair value of the forward contracts are recorded in other (income) expense, net in the condensed consolidated statements of operations.

Adjusted EBITDA

Adjusted EBITDA for the third quarter of fiscal 2026 was $21.6 million or 6.7% of net sales compared to $38.4 million or 9.7% of net sales for the same quarter of the prior fiscal year. Adjusted EBITDA for the first nine months of fiscal 2026 was $103.5 million or 9.2% of net sales compared to $161.5 million or 12.3% of net sales for the same periods of the prior fiscal year. The decrease in Adjusted EBITDA for the third quarter and first nine months of fiscal 2026 is primarily due to lower sales volume combined with an unfavorable mix shift towards value-based offerings, fixed cost deleverage across our operations, increased tariff and product input costs, and Digital Transformation spending related to our ERP deployment strategy, partially offset by lower volume-based costs at our operating locations, as well as cost savings initiatives within our manufacturing platforms and builder service centers, decreased incentive costs, timing of marketing-related expenses, and controlled discretionary spending.

Reconciliation of Net (Loss) Income to Adjusted Net Income
	Three Months Ended				Nine Months Ended
	January 31,				January 31,
(in thousands, except share data)	2026		2025		2026		2025
Net (loss) income (GAAP)	$	(28,715)	$	16,571	$	(8,023)	$	73,890
Add back:
Merger related expenses	4,156		—		13,441		—
Inventory step-up amortization			—		—		—
Restructuring charges, net	3,168		520		5,448		1,653
Goodwill impairment	$	30,129	$	—	$	30,129	$	—
Net loss on debt modification	—		—		—		364
Change in fair value of foreign exchange forward contracts	(1,010)		(1,418)		(5,624)		8,266
Tax benefit of add backs	(1,183)		221		(3,011)		(2,653)
Adjusted net income (Non-GAAP)	$	6,545	$	15,894	$	32,360	$	81,520
Weighted average diluted shares (GAAP)	14,569,239		15,159,442		14,548,800		15,430,164
Add back: potentially anti-dilutive shares (1)	66,031		—		67,628		—
Weighted average diluted shares (Non-GAAP)	14,635,270		15,159,442		14,616,428		15,430,164
EPS per diluted share (GAAP)	$	(1.97)	$	1.09	$	(0.55)	$	4.79
Adjusted EPS per diluted share (Non-GAAP)	$	0.45	$	1.05	$	2.21	$	5.28

(1) Potentially dilutive securities for the three- and nine-month periods ended January 31, 2026, respectively, have not been considered in the GAAP calculation of net loss per share as the effect would be anti-dilutive.

Outlook

We expect continued softening in both the new construction and repair and remodel markets and a decline in larger ticket remodel purchases. Macroeconomic concerns for the remainder of the fiscal year include consumer sentiment declines, tariffs, inflation risk, and the lack of meaningful interest rate relief in the near term.

During the remainder of fiscal 2026, we will continue to invest in the business through our digital transformation investments in our cloud-based ERP platform and by investing in automation.

Due to the proposed Merger, we will not be providing or updating previously issued financial guidance.

Additional risks and uncertainties that could affect the Company's results of operations and financial condition are discussed elsewhere in this report, including under "Forward-Looking Statements," in "Management's Discussion and Analysis of Financial Condition and Results of Operations," and under Part II, Item 1A, "Risk Factors," and in our Annual Report on Form 10-K for the fiscal year ended April 30, 2025, including under Part I, Item 1A. "Risk Factors," Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Part II, Item 7A. "Quantitative and Qualitative Disclosures about Market Risk."

Liquidity and Capital Resources

The Company's cash and cash equivalents totaled $28.3 million as of January 31, 2026, representing a $19.9 million decrease from its April 30, 2025 levels primarily due to $26.2 million in payments to acquire property, plant, and equipment, and $12.4 million of stock repurchases, offset by $31.1 million of cash provided by operations, during the first nine months of fiscal 2026. Cash provided by operations in the first nine months of fiscal 2025 was $63.7 million. The decrease in the Company's cash from operating activities in the current period was driven primarily by a decrease in net income and cash outflows from income taxes, prepaid expenses and other assets, and accrued marketing expenses, partially offset by cash inflows, or reduced

cash outflows, from customer receivables, inventories, accounts payable, and accrued compensation and related expenses. As of January 31, 2026, total long-term debt (including current maturities) was $369.1 million.

The Company's main sources of liquidity are its cash and cash equivalents on hand and cash generated from its operating activities. The Company can also borrow amounts under the Revolving Facility.

On October 10, 2024, the Company amended and restated its prior credit agreement. The A&R Credit Agreement provides the $500 million revolving loan facility with a $50 million sub-facility for the issuance of letters of credit, and the $200 million Term Loan Facility. Also on October 10, 2024, the Company borrowed the entire $200 million under the Term Loan Facility and approximately $173 million under the Revolving Facility to repay in full the approximately $370 million then outstanding under its prior credit agreement, plus accrued and unpaid interest, and to pay related fees and expenses. The Company began repaying the Term Loan Facility in specified quarterly installments beginning on January 31, 2025. The Revolving Facility and Term Loan Facility mature on October 10, 2029. Approximately $315.7 million was available under the Revolving Facility as of January 31, 2026.

The A&R Credit Agreement includes certain financial covenants that require the Company to maintain (i) a Consolidated Interest Coverage Ratio (as defined in the A&R Credit Agreement) of no less than 2.00 to 1.00 and (ii) a Total Net Leverage Ratio (as defined in the A&R Credit Agreement) of no greater than 4.00 to 1.00, subject, in each case, to certain limited exceptions.

The A&R Credit Agreement includes certain additional covenants, including negative covenants that restrict the ability of the Company and certain of its subsidiaries to incur additional indebtedness, create additional liens on its assets, make certain investments, dispose of its assets or engage in a merger or other similar transaction or engage in transactions with affiliates, subject, in each case, to the various exceptions and conditions described in the A&R Credit Agreement. The negative covenants further restrict the ability of the Company and certain of its subsidiaries to make certain restricted payments, including, in the case of the Company, the payment of dividends and the repurchase of common stock, in certain limited circumstances. See Note J — Loans Payable and Long-Term Debt for a discussion of interest rates under the A&R Credit Agreement and our compliance with the covenants in the A&R Credit Agreement. We expect to remain in compliance with each of the covenants under the A&R Credit Agreement during the remainder of fiscal 2026.

As of January 31, 2026 and April 30, 2025, the Company had no off-balance sheet arrangements.

The Company's investing activities primarily consist of investment in property, plant and equipment and promotional displays. Net cash used by investing activities was $29.0 million in the first nine months of fiscal 2026, compared with $32.2 million in the comparable period of fiscal 2025.

During the first nine months of fiscal 2026, net cash used by financing activities was $22.1 million, compared with $75.4 million in the comparable period of the prior fiscal year.

On November 20, 2024, the Board authorized an additional stock repurchase program of up to $125 million of the Company's outstanding common shares. This authorization is in addition to the $125 million stock repurchase program authorized on November 29, 2023. Repurchases may be made from time to time in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms the Company deems appropriate and subject to the Company's cash requirements for other purposes, compliance with the covenants under the A&R Credit Agreement, and other factors management deems relevant. The authorization does not obligate the Company to acquire a specific number of shares during any period, and the authorization may be modified, suspended or discontinued at any time at the discretion of the Board. Management generally expects to fund any share repurchases using available cash and cash generated from operations. Repurchased shares will become authorized but unissued common shares. Due to the terms of the Merger Agreement, the Company does not currently expect to repurchase additional shares under these authorizations.

Cash flow from operations combined with accumulated cash and cash equivalents on hand are expected to be more than sufficient to support forecasted working capital requirements, service existing debt obligations and fund capital expenditures for the remainder of fiscal 2026.

Seasonal and Inflationary Factors

Critical Accounting Policies and Estimates

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes to the Company's critical accounting policies as disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, 2025.

Loading holders...

Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Next expected filings

~2026-08-25 10-Q expected by 2026-09-07 (in 61 days)
~2026-11-24 10-Q expected by 2026-12-07 (in 152 days)
~2027-02-25 10-Q expected by 2027-03-10 (in 245 days)
~2027-06-25 10-K expected by 2027-06-25 (in 365 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-05-28 8-K Material Agreement Terminated; Completion of Acquisition/Disposition; Delisting Notice; Material Modification to Rights; Control Change; Officer/Director Change; Bylaws/Articles Amended; Regulation FD Disclosure; Financial Statements and Exhibits
2026-05-26 8-K Other Events
2026-05-12 8-K Costs Associated with Exit; Material Impairments
2026-04-22 8-K Other Events
2026-02-26 10-Q Quarterly Report
2026-02-26 8-K Earnings Release; Financial Statements and Exhibits
2025-11-25 10-Q Quarterly Report
2025-11-25 8-K Earnings Release; Financial Statements and Exhibits
2025-11-07 8-K Other Events
2025-10-30 8-K Shareholder Vote Results; Other Events; Financial Statements and Exhibits
2025-10-20 8-K Other Events
2025-10-06 8-K Other Events
2025-08-26 10-Q Quarterly Report
2025-08-26 8-K Earnings Release; Financial Statements and Exhibits
2025-08-06 8-K Material Agreement Entered; Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits

Line item
Period ending